Following the successful completion of its initial open season to sell firm storage services from natural gas storage assets located in north-central Pennsylvania, UGI Storage Co. commenced service April 1 for winning bidders, including Virginia Power Energy Marketing, UGI Central Penn Gas (UGI CPG), J. Aron/Goldman Sachs and New Jersey Resources Energy Services, the Reading, PA-based company said.

“The results confirm that our storage fields, which are located in the heart of the Marcellus Shale region, efficiently span interstate pipelines, Marcellus Shale gas and growth markets in Pennsylvania and the Northeast,” said Peter Terranova, UGI Storage vice president. UGI Storage is owned by UGI Energy Services Inc. (UGIES), a subsidiary of UGI Corp.

The three storage fields, which are located in Tioga, Potter and Cameron counties, have access to the Dominion Transmission, Transco, Tennessee Gas Pipeline and UGI CPG pipelines. UGIES plans future expansions of storage deliverability, interconnects with Marcellus producers and expansions to establish direct connections to high-value utility markets in southeastern Pennsylvania.

In January the Federal Energy Regulatory Commission (FERC) issued UGI Storage a certificate to acquire from UGI CPG, own and operate 14.7 Bcf of underground gas storage capacity in north-central Pennsylvania (see Shale Daily, Jan. 4). FERC also granted UGI Storage the right to sell storage services at market-based rates.

Last year UGIES agreed to gather the Marcellus production of Citrus Energy Corp. in Wyoming County, PA (see Daily GPI, Sept. 22, 2010). Last summer UGI Corp. said it would be spending about $300 million over the next two years on midstream infrastructure development in the Marcellus Shale (see Daily GPI, Aug. 16, 2010).